Due Diligence Document Checklist

Every document buyers and investors will request. Get organized before the process starts to accelerate your deal.

Format: PDF / Excel|Last Updated: January 2026

Key Takeaways

•Comprehensive list covering financial, legal, operational, and HR due diligence
•Organized by category for easy data room setup
•Includes priority indicators for critical vs. nice-to-have documents
•Works for both M&A transactions and investment rounds

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Get the complete due diligence checklist in PDF format with trackable checkboxes, or Excel for custom modifications.

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Why Preparation Matters

Due diligence delays kill deals. Buyers interpret slow document production as disorganization, hidden problems, or lack of commitment. Sellers who prepare in advance close faster and often achieve better terms.

Faster Closing

Organized sellers close 30-50% faster. Less back-and-forth means lower professional fees and reduced deal fatigue.

Fewer Surprises

Identifying issues before due diligence lets you address them proactively rather than negotiating from weakness.

Better Terms

Buyers discount for uncertainty. Complete documentation demonstrates a well-run business and supports your valuation.

Multiple Bidders

When you can quickly respond to multiple buyers, you maintain competitive tension that drives better outcomes.

Financial Due Diligence Documents

Financial documents form the core of any due diligence process. These verify historical performance and support forward projections.

Historical Financial Statements

Annual financial statements (3-5 years) - audited if available
Monthly financial statements (last 24 months)
Income statements, balance sheets, cash flow statements
Trial balance and general ledger
Management-prepared vs. CPA-prepared designations

Tax Documents

Federal and state tax returns (3-5 years)
Sales and use tax filings
Payroll tax records
Any tax audits or correspondence with tax authorities
R&D tax credit documentation (if applicable)

Supporting Schedules

Accounts receivable aging
Accounts payable aging
Inventory detail and valuation methodology
Fixed asset register and depreciation schedules
Debt schedule with terms and amortization
Prepaid expenses and accrual details

Projections & Analysis

Annual budget and monthly forecasts
Budget vs. actual variance analysis
Revenue projections with assumptions
Quality of earnings adjustments (owner add-backs, one-time items)
Working capital analysis

Quality of Earnings

Buyers will likely hire a third-party firm to prepare a Quality of Earnings (QoE) report. Having your own adjustments documented with supporting evidence accelerates this process and demonstrates transparency.

Legal Due Diligence Documents

Corporate Documents

Articles of incorporation/organization
Bylaws or operating agreement
Certificate of good standing (current)
Board and shareholder meeting minutes
Capitalization table (equity ownership)
Shareholder agreements, voting agreements
Stock option plans and grants

Contracts & Agreements

Customer contracts (especially top 10 by revenue)
Supplier and vendor agreements
Lease agreements (real estate, equipment)
Loan and credit agreements
Insurance policies
Licensing agreements (in and out)
Partnership or joint venture agreements

Intellectual Property

Trademark registrations and applications
Patent portfolio
Copyright registrations
Trade secret policies
Domain name registrations
IP assignment agreements (from employees/contractors)

Litigation & Compliance

Pending or threatened litigation
Regulatory filings and correspondence
Environmental assessments or issues
Government permits and licenses
Privacy policy and data protection compliance

Operational Due Diligence Documents

Business Operations

Organization chart
Key business processes documentation
Customer list with revenue by customer
Vendor list with spend by vendor
Product/service descriptions and pricing
Sales pipeline and backlog
Marketing materials and brand assets

Technology & Systems

IT systems inventory
Software licenses
Technology architecture documentation
Cybersecurity policies and assessments
Disaster recovery and business continuity plans
Source code repository access (if applicable)

Facilities & Assets

Real estate leases or ownership documents
Equipment list and condition
Vehicle titles and registrations
Maintenance records
Capital expenditure history and plans

Human Resources Due Diligence Documents

Employee Information

Employee roster with titles, hire dates, compensation
Key employee biographies
Employment agreements for key employees
Non-compete and non-solicitation agreements
Confidentiality/NDA agreements
Independent contractor agreements

Compensation & Benefits

Compensation philosophy and salary bands
Bonus and commission plans
Health insurance and benefits summary
401(k) or retirement plan documents
PTO and leave policies
Union agreements (if applicable)

HR Compliance

Employee handbook
OSHA records
Workers compensation claims history
HR complaints or investigations
I-9 compliance records

Organizing Your Data Room

A well-organized data room signals professionalism and accelerates review. Use a consistent folder structure:

📁 1.0 Financial

📁 1.1 Historical Statements

📁 1.2 Tax Returns

📁 1.3 Supporting Schedules

📁 1.4 Projections

📁 2.0 Legal

📁 2.1 Corporate Documents

📁 2.2 Contracts

📁 2.3 IP

📁 2.4 Litigation & Compliance

📁 3.0 Operations

📁 3.1 Business Operations

📁 3.2 Technology

📁 3.3 Facilities

📁 4.0 Human Resources

📁 4.1 Employees

📁 4.2 Compensation & Benefits

📁 4.3 HR Compliance

Naming Convention

Use consistent file naming: "[Folder#]_[DocumentType]_[Date/Period]" For example: "1.1_IncomeStatement_2024.pdf" or "2.2_CustomerContract_AcmeCorp_2023.pdf"

Preparation Timeline

3-6

3-6 Months Before Going to Market

Begin gathering documents. Identify gaps and start creating missing documentation. Clean up obvious issues (related party transactions, informal arrangements).

1-3

1-3 Months Before

Complete document organization. Set up data room. Consider sell-side QoE report. Prepare management presentation and company overview.

✓

During Due Diligence

Respond to requests within 24-48 hours. Track all requests and responses. Assign one person as data room administrator. Schedule management meetings strategically.

Frequently Asked Questions

How long does due diligence typically take?

Most due diligence processes take 30-90 days, depending on deal complexity. Simple asset purchases may complete in 2-3 weeks. Complex acquisitions with multiple entities, international operations, or regulatory considerations can extend to 6+ months. Having documents organized in advance significantly reduces timeline.

What if we can't provide a requested document?

Be upfront about what you don't have. Explain why it doesn't exist (e.g., 'We haven't had formal board meetings—owner-operated business') and offer alternatives when possible. Gaps aren't necessarily deal-killers, but surprises erode trust. Buyers expect some limitations in smaller businesses.

Should we use a virtual data room?

Yes, for any deal over $1M or involving multiple bidders. Virtual data rooms (VDRs) provide security, access tracking, and organization. Popular options include Datasite, Intralinks, and more affordable alternatives like Box or Google Drive with proper permissions. The cost is trivial relative to deal value.

What's the difference between sell-side and buy-side due diligence?

Sell-side due diligence is proactive—you hire advisors to review your own business before going to market, identifying and fixing issues. Buy-side due diligence is what buyers conduct on your business. Sell-side prep typically results in faster closes and fewer surprises that could reduce price.

Preparing for Due Diligence?

A fractional CFO can help you prepare for a transaction, organize your data room, and guide you through the due diligence process.

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